Via and Intel renew chipset wars

Following Intel's lawsuit over Via's Pentium 4 chipset, Via retaliates by alleging anti-competitive practices - and destruction of advertising balloons

Taiwan microchip designer Via Technologies on Monday began fighting back against an Intel legal action with a barrage of its own lawsuits, including accusations that Intel has violated Via patents, violated Chinese fair trade law and wilfully destroyed Via property.

The legal blasts by Intel and Via hark back to 1999, when the two companies -- respectively the largest and second-largest chipset makers -- were engaged in a similar row over Via's low-cost Pentium III chipset.

Via plans to file a lawsuit in a US district court alleging that the Pentium 4 processor and 845 chipset -- introduced today -- infringe on Via patents, effectively claiming ownership for some of the technology used in Intel's flagship processor.

"Intel processors and the Intel Pentium 4 processor compatible 845 chipset infringe Via's patents," commented Richard Brown, Via's director of marketing, in a statement. "Starting today, Via will begin filing a series of patent infringement lawsuits and civil actions in the Taiwan and US courts seeking damages and injunctive relief."

The company will also file a complaint with the Taiwan Fair Trade Commission alleging that Intel illegally attempted to block the smooth introduction of Via's chipset.

This claim relates to the accusation that Intel pressured manufacturers such as motherboard makers not to use Via's chipset, under threat of legal action. Via said last month it had received reports of such threats from motherboard and PC manufacturers, but Intel would not comment on the issue.

An additional criminal lawsuit accuses Intel representatives and employees of wilfully destroying Via property at the Computex 2001 trade show in Taipei in June. Via was promoting its new chipset at the show, and alleges that Intel employees tore down balloons and other promotional items.

Intel would not comment on Via's lawsuit or whether Intel was readying legal action against manufacturers using the Via chipset, but a representative denied that Intel would try to scare off Via customers.

Intel filed its lawsuit in US District Court in Delaware on Friday. The lawsuit alleges that Via's P4X266 and P4M266 chipsets, which were released last month, infringe on five Intel patents.

S3 Graphics is also named as a defendant. S3 Graphics is a joint venture created by Via and Sonicblue -- a graphics chipmaker turned consumer electronics company -- to help develop chipsets.

The two companies are no strangers to each other when it comes to lawsuits. Intel filed a similar series of lawsuits against Via in 1999 after the company came out with a Pentium III chipset. Via, which saw its sales zoom with the new chipset, alleged that Intel was merely trying to clamp down on a successful competitor.

That suit was effectively settled in July 2000. In the new lawsuit, Intel alleges that Via does not have a licence to build a Pentium 4 chipset. Via contends this, citing a convoluted series of deals that it says do give it the necessary rights. Intel originally signed a licence with S3, which morphed into Sonicblue. Subsequently, Sonicblue and Via created a company in the Cayman Islands called S3 Graphics. Via is said to own roughly half or more of S3 Graphics and control its management.

The suit is likely to hinge on whether the chipset licence survived the legal transformations. Typically, however, technology licences cannot be transferred or granted to other parties.

Chuck Mulloy, an Intel spokesman, said that neither Via nor the Sonicblue-Via joint venture has a licence. "We believe these parts do infringe on our patents," he said.

In addition, the two Via chipsets do not "meet the requirements of the S3 licence", said Mulloy, without specifying further. S3 was probably licensed a right to make Pentium 4 chipsets with integrated graphics, a feature the Via chipsets don't have.

Acer Labs, SiS and ATI Technologies all have Pentium 4 chipset licences and are expected to release products soon.

CNET's Michael Kannellos contributed to this report.

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